Related Articles

MOSCOW— Russia is steeply ramping up oil deliveries to China, with Asia now importing almost a fifth of oil exports from the world's largest crude producer in a strategic shift meant by the Kremlin to end reliance on weak and saturated European markets.

Russia will increase oil supplies to China by 13 percent in July-September from the previous three months, a shipping schedule obtained by Reuters showed on Tuesday.

Together with supplies to the Pacific port of Kozmino, Russia will export around 750,000 barrels per day to Asia, or 17 percent of its overall exports of 4.4 million bpd.

“Russia has been losing its interest in Europe where oil consumption is stagnant. It's looking increasingly to the East,” Valery Nesterov, analyst from Sberbank CIB, said.

The speed of changes in export patterns has aroused widespread surprise as it took Russia only five years to re-route huge volumes, previously destined for European markets.

Russia first started supplying China by railway and then by a new pipeline while opening a Pacific port, Kozmino, in 2009.

The projects cost pipeline monopoly Transneft dozens of billions of dollars and spurred criticism from some private Russian producers who said they all had to pay higher tariffs to Transneft so it could build the pipelines.

Private producers also said they benefited little from the projects as the main volumes supplied to China came from state oil major Rosneft.

The Kremlin oil major raised tens of billions of dollars from Beijing by pre-selling its oil under long-term deals in order to finance its growth and acquisition drive.

The shift in export route has also led to a gradual strengthening of Russian oil prices for European consumers, who had been used for decades to buying Russia's export blend Urals at a steep discount to benchmark Brent prices.

Over the past few years, Urals has repeatedly traded at a premium to Brent, including on Tuesday, as traders said Russian supplies to Europe looked thin, especially to northern countries from Russia's Baltic ports.

“That is a tight schedule for the Baltic again... It is the Baltic which has to compensate for higher deliveries to China,” a trader with an oil major said.

Urals trading at a premium to Brent means refiners have to pay heavily for the previously cheap oil, making life harder for them at a time of small profits, known in the industry jargon as refining margins.

“Next year and in 2015 it will get only tighter as supplies to China are set to rise,” the trader with a major said.

Rosneft agreed in March to triple supplies to China. It did not specify over what period, but it plans to increase deliveries by 800,000 tons this year on top of the 15 million tons (300,000 barrels per day) it already supplies annually.

Traders expect the volumes for China to rise to 17 million in 2014 and by 2015 they could amount to as much as 20 million tons, on par with Germany, the top individual consumer of Russian oil to date.

Urals crude exports via the Baltic Sea port of Primorsk are set to fall by 7.4 percent compared with the second quarter to 14.7 million tons, the schedule showed.

Urals exports from the Baltic Sea port of Ust-Luga will decline by 6.4 percent to 7 million tons, while shipments from the Black Sea port of Novorossiisk will increase 3.4 percent to 9.95 million tons.

U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.

Video

U.S. Secretary of State John Kerry has told his Russian counterpart, Sergei Lavrov, that his country could face further consequences to what he called its “already strained economy” if Moscow does not fully comply with a cease-fire in Ukraine. The two met, on Monday, on the sidelines of a U.N. Human Rights Council meeting in Geneva, where Kerry outlined human rights violations in Russian-annexed Crimea and eastern Ukraine. VOA State Department correspondent Pam Dockins reports from Geneva.

Video

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.

Video

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.

Video

Despite the ongoing ceasefire in Ukraine, soldiers in the city of Mariupol fear that pro-Russian separatists may be getting ready to attack. The separatists must take or encircle the city if they wish to gain land access to Crimea, which was annexed by Russia early last year. But Ukrainian forces, many of them volunteers, say they are determined to defend it. Patrick Wells reports from Mariupol.

Video

As low oil prices and Western sanctions force Russia's economy into recession, thousands of Moscow restaurants are expected to close their doors. Restaurant owners face rents tied to foreign currency, while rising food prices mean Russians are spending less when they dine out. One entrepreneur in Moscow has started a dinner kit delivery service for those who want to cook at home to save money but not skimp on quality. VOA's Daniel Schearf reports.

Video

The United States and Cuba say they have made progress in the second round of talks on restoring diplomatic relations more than 50 years after breaking off ties. Delegations from both sides met in Washington on Friday to work on opening embassies in Havana and Washington and iron out key obstacles to historic change. VOA’s Mary Alice Salinas reports from the State Department.

Video

One after another, presumptive Republican presidential contenders auditioned for conservative support this week at the Conservative Political Action Conference held outside Washington. The rhetoric was tough as a large field of potential candidates tried to woo conservative support with red-meat attacks on President Barack Obama and Democrats in Congress. VOA Political Columnist Jim Malone takes a look.

Video

New Yorkers take pride in setting world trends — in fashion, the arts and fine dining. The city’s famous biannual Restaurant Week plays a significant role in a booming tourism industry that sustains 359,000 jobs and generates $61 billion in yearly revenue. VOA's Ramon Taylor reports.

Video

Issues like the Keystone XL pipeline, fracking and instability in the Middle East are driving debate in the U.S. about making America energy independent. Recently, the American Energy Innovation Council urged Congress and the White House to make expanded energy research a priority. One beneficiary of increased energy spending would be the Brookhaven National Lab, where clean, renewable, efficient energy is the goal. VOA's Bernard Shusman reports.

Video

There has been a surge of interest in the American civil rights movement of the 1950s and '60s, thanks in part to the Hollywood motion picture "Selma." Five decades later, communities in the South are embracing the dark chapters of their past with hopes of luring tourism dollars. VOA's Chris Simkins reports.

Video

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.

Video

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.